» Management in Panama: Guide to Intercultural Management

Being a Manager in Panama

The business set up in Panama is very formal and intercultural management will be more successful if treat people with the respect and deference commanded by their position. This is a culture where it is important to take time to build a business relationship and where personal introductions are important. "Who you know" is often as important as "what you know". "Personalismo" (personal relationships), which involves loyalty to family and friends, provides the glue that binds the country together.

The Role of a Manager

Cross cultural communication will be more effective when managing in Panama, if you keep it in mind that each person has a very distinct role within the organization. People believe that their supervisors have been chosen because they have more experience than those they manage, and it is, therefore, unnecessary, and even inappropriate for them to consult with lower-ranking individuals when decision-making.

In Panama, as in other hierarchical societies, managers may take a somewhat paternalistic attitude to their employees. They may demonstrate a concern for employees that goes beyond the workplace and strictly professional concerns. This may include involvement in their family, housing, health, and other practical life issues.

Approach to Change

Panama’s intercultural adaptability and readiness for change is apparent although changes are still made slowly, requiring a considerable amount of thought, planning and evaluation. It would be perceived as imprudent to introduce rapid change, and yet it would be recognized as poor management to resist change unnecessarily.

Intercultural sensitivity is important with Panama’s attitude toward risk dramatically impacted by the negative ramifications of failure on both the individual and the group.

Approach to Time and Priorities

Deadlines and timescales are fluid in Panama. Patience will play an essential part in successful cross cultural management.

While timescales and deadlines need to be set well in advance and reiterated carefully, it should be understood that these will be viewed as flexible.

Global and intercultural expansion means that some managers may have a greater appreciation of the need to enforce timescales and as such, agreed deadlines are more likely to be met.

Decision Making

Panamanian business is hierarchical. Job functions, roles and responsibilities are well-defined and respected. Even in meetings, subordinates will demonstrate deference and respect towards those of a higher level. Decisions are made at the top of the company, but only after much consultation to determine how it will impact on others.

Boss or Team Player

If you are working with people from Panama, it is important to remember the role that hierarchy plays in teamwork and collaboration. Traditionally, the supervisor is seen to hold that position because of superior knowledge and skills. It would traditionally have been unthinkable for someone of a higher position to collaborate with, or ask ideas of one of a lower status.

This is changing somewhat in younger generations, particularly those employed by multinational corporations. If you would like to encourage participation it is important first to clearly establish a non-threatening work environment and communicate clearly that their participation is desired.

Successful cross cultural management will rely on the individual’s interpersonal skills and ability to maintain cordial relationships with their subordinates. This can be as important as their technical knowledge.

Communication and Negotiation Styles

Expect a fair amount of small talk before getting down to business. Personal relationships are very important. Panamanians prefer to deal with those they trust; therefore much time is spent in developing the relationship. It will usually take several visits to close a deal. Business is hierarchical and the person with the most authority makes decisions after considering how the decision will affect the group. Panamanians do not like confrontation so positive signals may be given out of politeness rather than actual agreement. Likewise do not assume that your proposal is being well received simply because no one is challenging what you say. Decisions are often based upon the personal preference of the decision maker, which is why spending time to develop trust and personal relationships is crucial.